Cha Cha, Inc. will pay a $5 dividend one year from now and a $5.10 dividend...
Cha Cha, Inc. will pay a $5 dividend one year from now and a $5.10 dividend two years from now. The stock will be sold in two years for an estimated price of $32. If the required rate of return is 8%, which of the following values is closest to the stock's price?
Homework Answers
Stock price = D1/(1+ ke)^1 + D2/(1+ke)^2 + P2/(1+ke)^2
D1 = 5
D2 = 5.10
P2 = 32
Ke = 8%
(5/1+8%)+(5.1/(1+8%)^2)+(32/(1+8%)^2)
=36.43689986
So, stock price is closet to $36.44
Add Answer to:
Cha Cha, Inc. will pay a $5 dividend one year from now and a
$5.10 dividend...
Suppose Disney Inc. is expected to pay a $5 dividend in one year. If the dividend...
Suppose Disney Inc. is expected to pay a $5 dividend in one year. If the dividend is expected to grow at 8% per year and the required return is 12%, what is the price? Versace Company is expected to pay a dividend of $5 next period and dividends are expected to grow at 6% per year. The required return is 15%. What is the current price? Babe Clothing Company is expected to pay a dividend of $5 next period and dividends...
Prairies Oil Sands Inc. is expected to pay a dividend of $1 in one year. If...
Prairies Oil Sands Inc. is expected to pay a dividend of $1 in one year. If the dividend growth rate is 2 percent forever and the required return is 10 percent, what should the stock be sold for five years from now? A. $13.53 B. $13.80 C. $14.08 D. $14.62
14 pts). Hadlock Healthcare expects to pay a $1.00 dividend at the end of the year...
14 pts). Hadlock Healthcare expects to pay a $1.00 dividend at the end of the year (DI 51.00). The stock's dividend is expected to grow atamte of 10 percent a year until three years from now (t = 3). After this time, the stock's dividend is expected to grow at a constant rate of 5 percent wear. The stock's required rate of return Kis 11 percent A Estimate the stock price Po 3. Calculate expected dividend yield and expected capital...
Cowboy is expected to (1) pay a cash dividend of $11 per share one year from...
Cowboy is expected to (1) pay a cash dividend of $11 per share one year from now, and (2) dissolve and pay a liquidating dividend of $30.25 per share two years from now. Cowboy is all equity financed with a required rate of return of 10%. What is the stock price per share of Cowboy one year from now? 38 O 35 27.5 30.25
A share will pay a dividend of $2.5 next year and $3.2 two years from now....
A share will pay a dividend of $2.5 next year and $3.2 two years from now. The dividend will then grow at the rate of 5% forever, If the required rate of return is 8% p.a., what is the value of the share? Select one: a. $96.51 b. $93.97 c. $101.56 X d. $101.08
A corporation will pay a $1 dividend in one year, $2.00 in two years and $3...
A corporation will pay a $1 dividend in one year, $2.00 in two years and $3 in threee years. After that, dividends are expected to grow by 49% per year. The required rate of return is 9% a. What will be the price of the company's stock two years from now? b. What should be the price of the stock today? 1.
Question 30 2 pts Etling Inc. is expected to pay a $2.50 dividend in one year and a $3 dividend in two years. The d...
Question 30 2 pts Etling Inc. is expected to pay a $2.50 dividend in one year and a $3 dividend in two years. The dividends are expected to grow at a 3% growth rate after that forever. If the required return is 8%, what is the price of the stock? O $36.37 $67.30 $29.71 $6.19 $57.87
A company is expected to pay a dividend of $1.34 per share one year from now...
A company is expected to pay a dividend of $1.34 per share one year from now and $1.96 in two years. You estimate the risk-free rate to be 4.4% per year and the expected market risk premium to be 5.1% per year. After year 2, you expect the dividend to grow thereafter at a constant rate of 5% per year. The beta of the stock is 1, and the current price to earnings ratio of the stock is 16. What...
Stock C is expected to pay a dividend of $5.10 next year. Thereafter, dividend growth is...
Stock C is expected to pay a dividend of $5.10 next year. Thereafter, dividend growth is expected to be 21.00% a year for five years (i.e., years 2 through 6) and zero thereafter. If the market capitalization rate for stock C is 8.00%, what is its stock price?
A stock is expected to pay a dividend of $1.00 at the end of the year...
A stock is expected to pay a dividend of $1.00 at the end of the year (i.e., D1 = $1.00), and it should continue to grow at a constant rate of 5% a year. If its required return is 13%, what is the stock's expected price 1 year from today? Do not round intermediate calculations. Round your answer to the nearest cent. $ ___________________________________________________________________________________-- Holtzman Clothiers's stock currently sells for $39.00 a share. It just paid a dividend of $1.00...
14 pts). Hadlock Healthcare expects to pay a $1.00 dividend at the end of the year (DI 51.00). The stock's dividend is expected to grow atamte of 10 percent a year until three years from now (t = 3). After this time, the stock's dividend is expected to grow at a constant rate of 5 percent wear. The stock's required rate of return Kis 11 percent A Estimate the stock price Po 3. Calculate expected dividend yield and expected capital...
Cowboy is expected to (1) pay a cash dividend of $11 per share one year from now, and (2) dissolve and pay a liquidating dividend of $30.25 per share two years from now. Cowboy is all equity financed with a required rate of return of 10%. What is the stock price per share of Cowboy one year from now? 38 O 35 27.5 30.25
A share will pay a dividend of $2.5 next year and $3.2 two years from now. The dividend will then grow at the rate of 5% forever, If the required rate of return is 8% p.a., what is the value of the share? Select one: a. $96.51 b. $93.97 c. $101.56 X d. $101.08
A corporation will pay a $1 dividend in one year, $2.00 in two years and $3 in threee years. After that, dividends are expected to grow by 49% per year. The required rate of return is 9% a. What will be the price of the company's stock two years from now? b. What should be the price of the stock today? 1.
Question 30 2 pts Etling Inc. is expected to pay a $2.50 dividend in one year and a $3 dividend in two years. The dividends are expected to grow at a 3% growth rate after that forever. If the required return is 8%, what is the price of the stock? O $36.37 $67.30 $29.71 $6.19 $57.87
Most questions answered within 3 hours.
-
What mechanisms Drive speciation??
(I.e. what was Dawins theory on the orgin of species, and how...
asked 39 minutes ago -
The manager at a car assembly plant believes that the mean
assembly time for a car...
asked 1 hour ago -
Which of the following is true of electron capture?
A) It decreases the nuclide's mass number...
asked 3 hours ago -
Assuming an efficiency of 43.10%, calculate the actual yield of
magnesium nitrate formed from 114.9 g...
asked 3 hours ago -
The highly pathogenic bacterium Clostridium
perfringens causes gangrene, a disease that results in the
destruction of...
asked 5 hours ago -
In the context of situation analysis, which of the following is
a category for analysis in...
asked 5 hours ago -
In a study of the gas phase decomposition of sulfuryl chloride
at 600 K SO2Cl2(g)SO2(g) +...
asked 5 hours ago -
75 g of 2-propanol (C3H8O) and 25 g of pentane are mixed in a
200 mL...
asked 5 hours ago -
The 2800-turn coil in a dc motor has an area per turn of 1.1 ×
10-2...
asked 5 hours ago -
Draw a combinational logic circuit diagram with a symbol inside
the box for two I/P of...
asked 5 hours ago -
The cliché we use quite a lot in finance is: there is a need to
maximize...
asked 5 hours ago -
In class we discussed the addition of HCl to alpha pinene. Would
you expect one or...
asked 5 hours ago